Complex Dynamics and Systemic Change: How Things Can Go Very Wrong

Peter Murrell (1991) instigated a debate regarding the appropriate nature and speed of the process of systemic transformation in the formerly centrally planned economies (CPEs).1 Murrell's essential position is that advocates of big bang or shock therapy approaches to transition may be overly optimistic about the outcomes of their proposed policies and that a more gradualistic, evolutionary approach may be more appropriate in many cases. Murrell (1991) argues that this can be the case because of numerous difficulties in information and decision-making coordination that can arise in decentralized market economies,2 drawing on the literature on informational asymmetries (Grossman and Stiglitz, 1976), information